Personal loans – Is it a credit worth burner?

By Nirjharini | February 28, 2014
Personal Loan

Personal Loan

Having a sound financial stand is considered to be essential nowadays, not just because we have to deal with our daily bread and butter requirements, but there are so many other expenses that wait for us at the other side of the door. Nidhi, an independent girl living in Bangalore, worked as a sales executive for a multinational firm. For her, it is very crucial to figure out the kind of financial structure that will suit her lifestyle, so that she never runs out of money. A few months ago, she decided to apply for personal loan to renovate her house, including making investments in luxurious items. Although banks have reduced the personal loan interest burden for the potential borrowers, but should a sales executive in a city like Bangalore take it this lightly?

Personal loans come under the category of unsecured loans and this means that the applicant doesn’t need to fill up anything in the collateral bag. Banks go through the credit rap-sheet of the applicant so that they can make sure whether or not the person is eligible. Regardless of its ‘all purpose’ nature, there are various factors that one should consider before reaching out to any financial institution and getting in line with this particular loan option.

Personal Loan and Its Allure

No wonder people have developed an undying interest in personal loans as for them it is a means to get rid of their tedious and rather unpleasant bills or to indulge in a luxurious lifestyle. Its hassle-free process makes it the number one choice of loan hunters these days. Unlike other specific streamlined loans, a personal loan accelerates the ability of the borrower to immediately write off the debts and this can spark a hunger inside the borrower to go for it whenever the need arises.

Debt Is Never Good!

There is absolutely no excuse that is sufficient to encompass the activity of hitting a debt finance scheme to pay off other debts. The only reason why people fall for this particular loan is that they don’t have to embed any kind of collateral in their agreement which gives them all the leverage they need. But this does not give personal loan a clean slate as it sooner or later ruins the borrower if the payments are not made diligently.

Days of Emergency

Emergency is something that can force anyone to resort to taking a loan from a financial institution in order to get things done. Before taking a personal loan, one should be utterly sure about how the repayment shall be handled. Banks granting loans to borrowers are liable to make reports that are further sent to higher authorities; and in that case, if a person fails to repay the loan, his credit rap-sheet graph can face a downfall. This can make it very hard for the person to avail a loan in the future.

Personal Loans for Luxuries of Life

Personal loan when taken for a luxurious lifestyle is considered to be very immoral, even if the borrower is duly paying the debt along with the interest. This deteriorates the borrower’s stable mindset for handling monetary affairs properly. One should never opt for personal loans if the amount is to be invested in fancy silverware or for seasonal holidays.

The Swinging Axe of Terms and Conditions

Less paperwork and hassles may have made this loan the easiest one to grab, but this does not compensate the rigidity that lies in the agreement. There are adequate terms and conditions present that can choke the borrower.

Banks Personal Loan Interest Rates Terms and Conditions
HSBC 13.5% – 17.5% Limited City Hubs, Loan Amount Limited To Rs 15 Lac, 6 Month Disbursement Period & 1% Processing Fee
ICICI 13.5% onwards Loan Amount Limited To Rs 15 Lac, 2.25% Processing Fee Including Service Tax, Rs 500 For Each Check Swap & 2% Monthly Interest For Late Payment
PNB 15.50% 1.8% Processing Fee Including Tax, Collateral Deposition of 100% of the Loan Amount,
AXIS 15.50% – 24.00% Loan Only Granted To Salaried People, 1.50% To 2.00% Processing Fee, Loan Granted To Applicants From 21 To 58 Years Of Age, Minimum Monthly Income Of Rs 15000
SBI Floating Rate Of Interest (Depending Upon Certain Internal Loaning Policies Of The Bank) Only Check Off And Post Dated Checks Accepted For Repayment, 1% Processing Fee, Rs 250 Chargeable For Every Bounced Repayment Check, Loan Only Available For People With Regular Income

Avoid Defaults

It is essential for a person to avoid anything potentially harmful for the ongoing credit record with the concerned financial institution. If any rule for the repayment is violated whatsoever, the borrower can face huge problems in the future, including the foreclosure of the collateral security (if any).

All in all, personal loans do have some intriguing benefits, but they don’t seem to be very healthy for one’s financial stand in the 21st century. There are of course various other options for acquiring money that are more flexible than personal loans.

If you want to secure a personal loan in a stress-free manner and increase the chances of success, apply for personal loan at

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